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Thursday, September 28, 2017

Complete explanation of Mining Energy Consumption and Bitcoin Ecology

The question here is how can Bitcoin need energy?

Bitcoin mining, can't deny it will consume energy consumption. Although, the amount of energy used is still far from the total electrical energy used in the world today. But the reality is Bitcoin mining does require electrical energy.

On the mining device would need to be produced. Both when still in the form of physical raw materials, then turn them into Asic mining devices. And from the process will also require energy. As for the delivery of finished products Asic devices to consumers, also consume energy in the delivery. Then, continuing again after the device is used for Bitcoin mining, computing devices will also consume energy.

From the level of energy consumption that has been going on in Bitcoin mining today, many expectations will be able to lower the level of energy consumption. Especially in the Bitcoin mining process. Let's take a closer look at the level of energy consumption in Bitcoin.

1. Power Requirement

As explained above, that when Bitcoin mining is done will consume electricity, ie electricity. Likewise, when using Asic devices. In the development of mining devices, you can say there is a decline and the effectiveness of the use of electrical energy.

But when Asic comes in, although in the end there is the development of Asic devices that allow to consume less electricity, but can be said, because Asic also hash rate in Bitcoin network increased rapidly. And it also implies an increase in electricity consumption for Bitcoin mining.

There is a review of research conducted by Sebastian Deetman about the power consumption of mining Bitcoin. And also the relation to the environmental impact that can be caused. The review can be read more here:

2. Power Consumption Electricity Bitcoin Network

For a miner, surely it should be able to calculate how much power is available in the mining device. Simultaneously, also calculate the cost of electricity that will be needed. In March, electricity tariffs in Indonesia fell, although slightly. Approximately electricity tariffs in March 2916 and then as follows:

Electricity Tariff March 2016: Rp 1355 / kWh

The group of tariffs that enter this group:
  1. Small household R1 / 1300 VA
  2. Small household R1 / 2200 VA
  3. The household is being R2 / 3500-5500 VA
  4. Large household R3 / 6600 VA and up
  5. Midsize business B2 / 6600 VA-200 kVA
  6. Government is P1 / 6600 VA-200 kVA
  7. Street Lighting P3
Suppose we use the Antminer S7 for $ 597 ($ 7,960,645.88 - the price at the current amazon), 4.73 TH / s with 1210 watt power consumption. To calculate it, we can use the following formula:

 Power Consumption = Watt Device / 1000 Usage per Day (hour) x 30

So on the use of Antminer if full working within 1 month non stop, it will require the following power:

1210/1000 x 24 x 30 = 871.2 KWH.

If the electricity tariff is Rp 1355 / kWh, then the total cost of electricity in 1 month is:

1355 × 871.2 = Rp. 1,180,476, -

Of course, the amount is only calculated from the amount of electricity consumed on the Asic device in Antminer S7 only. It still does not include the calculation of the cost of the PC or laptop power used, or also additional cooling that will be used if necessary. Similarly, the connection fee used to connect devices on Bitcoin network.

If we try to calculate again the amount of Bitcoin that can be produced, we can also do the calculation, here's how to calculate it:

HashRate Asic Antminer S7: 4,73 TH / s
Difficulty Current: 194254820283.44403
Bitcoin Price ($): 455.4 USD
Electricity per KWH (convert to $): 0.09 USD
Difficulty: 5% (2 weeks)
Pool cost (antpool): 2.5%

The data we enter into the mining calculator to calculate the range of what can be in the mining. The result is as follows:

Hours: $ 0.12
Day: $ 2.82
Sunday: $ 19.77
Month: $ 84.71
Year: $ 1,030.64

You can try the calculation by entering the above information data on the mining calculator below:

3. Mining Calculator

From the example of the calculation of electricity costs and the range of mining results above, we can judge that the magnitude of the electric power also affects also the mining pattern, as well as on the mining results that can be obtained. Within a month of nonstop device usage, between the results obtained with the cost of electricity is also not too big difference. Of course, it is in accordance with the electricity rates in Indonesia. Net profits will be obtained, if it has been mining for about 7 months, then even then can cover for the cost of purchasing the device.

Meanwhile, within a period of 7 months, the miners also do not know what will happen. Suppose that there is a device malfunction, the price of Bitcoin is down, the cost of electricity may increase in the next 2 months, or anything else.

4. Cooler

This cooling is considered an important component in Bitcoin mining. And in practice it will also consume electrical energy. If you do not use it, then certainly will cause damage to the mining device used.

But if Bitcoin mining is done in small sizes, the cost for this cooler may also be small and usually underestimated. Unlike the case if mining is done in large sizes such as a large Bitcoin mining center professionally. This cooler is quite influential and will also cost a large power consumption.

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